GameStop : GME

[wearthefoxhat]

Amazing how MSM are blaming Day Traders & "The Internet" for hedge funds losing Billions when they were short 140%. Blame the little man for Wall Streets behaviour... what about the little man's pension that was in one of them funds that were recklessly short 140%. Has anyone got an answer to how that happens BTW?

Could be the nett result of a leveraged position. A few of them will get margin calls soon if it doesn't go back in their favour.

It's like wall street laying a runner a 1000-1 in play when it's tailing off...(we all know how that sometimes turns out)

[wearthefoxhat]

If all else fails..pull the plug on the trading desks...

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[jamesg46]

Amazing how MSM are blaming Day Traders & "The Internet" for hedge funds losing Billions when they were short 140%. Blame the little man for Wall Streets behaviour... what about the little man's pension that was in one of them funds that were recklessly short 140%. Has anyone got an answer to how that happens BTW?

Could be the nett result of a leveraged position. A few of them will get margin calls soon if it doesn't go back in their favour.

It's like wall street laying a runner a 1000-1 in play when it's tailing off...(we all know how that sometimes turns out)

But am I missing something. If a company is worth somewhere between $0 & $100 Billion how can you be short 140% of that companies value without pushing the price of a share to or below $0? The company will float shares onto the exchange based on it's value that share price will fall or increase, so unless something shady as hell was going on and the market is manipulated it should be impossible for a fund to be short 140% the company value. What am I missing?

[wearthefoxhat]

This gives some sort of explanation. Something on the lines of a short-ratio. So in this case, 140% is the short ratio and can even be more.

https://www.investopedia.com/terms/s/sh ... tratio.asp

[jamesg46]

This gives some sort of explanation. Something on the lines of a short-ratio. So in this case, 140% is the short ratio and can even be more.

https://www.investopedia.com/terms/s/sh ... tratio.asp

OK, thanks! Starting to make more sense BUT, was the short interest ratio 140% or were they short 140% of the company value is key here then... that link says the difference between the 2 is very important. Surely it has to be the short interest ratio.... I dunno but as things unfold I'm sure I will get to know. Thanks Fox!

[jamesg46]

If all else fails..pull the plug on the trading desks...


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Still open for trading but they've restricted to no leverage.

[MAGTRADEUK]

short squeeze, major short position closed, chat room chatter and an Elon Musk tweet ,,,,,,,,,

https://www.hl.co.uk/shares/stock-marke ... n-gamestop

https://www.hl.co.uk/shares/stock-marke ... -platforms

[gazuty]

Funds were 140% short of GME, how is that even possible?

The very same shares can be borrowed more than once.

A owns 100 shares. Lends 50 shares to B. B owes A 50 shares. B sells borrowed shares to C. B is short 50.

C is long 50 shares.

C lends 50 shares to D. D owes 50 shares to C. D sells borrowed shares to E. D is short 50.

E is long 50 shares.

E lends 50 shares to F. F owes E 50 shares. F sells 50 shares to G. F is short 50.

G is long 50 shares.

Let’s stop there.

A holds 50 long and is owed 50 shares from B. Physical and synthetic long of 100.

G holds 50 long.

C is owed 50 shares from D. Synthetic long.

E is owed 50 shares from F. Synthetic long.

B, D and F are each short 50 shares.

And we only needed 100 shares to create that mess.

[wearthefoxhat]

Funds were 140% short of GME, how is that even possible?

The very same shares can be borrowed more than once.

A owns 100 shares. Lends 50 shares to B. B owes A 50 shares. B sells borrowed shares to C. B is short 50.

C is long 50 shares.

C lends 50 shares to D. D owes 50 shares to C. D sells borrowed shares to E. D is short 50.

E is long 50 shares.

E lends 50 shares to F. F owes E 50 shares. F sells 50 shares to G. F is short 50.

G is long 50 shares.

Let’s stop there.

A holds 50 long and is owed 50 shares from B. Physical and synthetic long of 100.

G holds 50 long.

C is owed 50 shares from D. Synthetic long.

E is owed 50 shares from F. Synthetic long.

B, D and F are each short 50 shares.

And we only needed 100 shares to create that mess.

Also, the options market seems designed to confuse the process.

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Makes you think....

wall street.png

[wearthefoxhat]

Prices will fall at some point too.

falls.png

[verance]

Proof that sports betting markets are more efficient than financial markets

[sionascaig]

Funds were 140% short of GME, how is that even possible?

The very same shares can be borrowed more than once.

A owns 100 shares. Lends 50 shares to B. B owes A 50 shares. B sells borrowed shares to C. B is short 50.

C is long 50 shares.

C lends 50 shares to D. D owes 50 shares to C. D sells borrowed shares to E. D is short 50.

E is long 50 shares.

E lends 50 shares to F. F owes E 50 shares. F sells 50 shares to G. F is short 50.

G is long 50 shares.

Let’s stop there.

A holds 50 long and is owed 50 shares from B. Physical and synthetic long of 100.

G holds 50 long.

C is owed 50 shares from D. Synthetic long.

E is owed 50 shares from F. Synthetic long.

B, D and F are each short 50 shares.

And we only needed 100 shares to create that mess.

I checked with an investment pal and his comments were:

Re the 140% short - what market capitalisation is this based on - maybe an old on. I shouldn't be that high - he reckons 30 to 40% unless something v dodgy going on.

Re loaning shares: It doesnt ( or shouldnt) work like that unless the market intermediary facilitating the borrow has a death wish and its hard to think a market participant approved by ( in this case the nyse) would leave themself in a net short position. Think of your example when a b c etc are all end investors and x is the entity fulfilling their trades which is what happens in reality. X has to report net closing position and all p and l daily to the exchange. If they have net short positions then exchange either suspends them or asks they clear by next day

They do however go wrong sometimes. A day can be long.... but usually it involves fraud

Edit - Investor business daily reports percentage shorts for gme is 102 percent. Not sure where the 2 comes from, probably technical reason but yes it does look like all stock has been borrowed. Next worse is 64 percent by something called bed bath and beyond... sounds like another loser to me...

[Euler]

Bulls, Bears and Starlings

Flash mobs are swarming over the stock market. These aren't predatory hedge funds or high-frequency trading firms wielding massive computing power, though. They're self-taught amateur traders — and they're making investment professionals look like idiots.

https://columnalerts.cmail19.com/t/View ... 3C95A53812

[superfrank]

The Fed created this with printing and market manipulation via asset purchases.

Now every man and his dog thinks stocks are a one-way bet - and everyone wants a share of the free money.

You reap what you sow.

[gazuty]

Just as a follow up, remember that in many of these tech stocks there are founders and other insiders who do not hold their shares in the custody system. Most retail are not in the custody system. That leaves instos. So the free float of shares in the custody system might be only 60% of all issued shares.

Some instos prohibit their custodian from lending out shares but most are willing to take the 15 to 20 basis points that comes with lending out their shares. It’s a nice little kicker on their earnings in a very low interest rate environment.

And then between all the custodians and prime brokers those shares are borrowed and sold, borrowed and sold, borrowed and sold. That’s how with 40-60% of free float you get up above that in percentage shorted. And that’s why a short squeeze can get very painful for those on the short side. You see from my example how there are only 50 shares in the market to satisfy 150 shares of borrow. And bingo was his namo.